I am legally responsible if my ex-wife defaults on the mortgage if she was awarded the house by the court

Viewed 540 times. Posted 12 months ago in Divorce / Separation

Property responsibilty: If my wife is granted our home in the divorce by the courts and our settlement agreements states that she has 5 years to refinance in her own name and remove my name am I still legally responsible if she defaults on the mortgage even though she was awarded the house by the court? - Is this your question? Add additional information

Answers (2)

Margery Ellen Golant

This attorney is licensed in Florida and 1 other state. Posted 12 months ago.

Yes. Your mortgage obligation was a contract which you, your wife and your lender entered into. Your divorce agreement is a contract only between you and your wife, which the court adopts in its divorce decree. However, the lender is not a party to that agreement or to the divorce action, therefore its rights cannot be affected by what agreements the two of you make or by the divorce decree.

This is a situation that often "bites" people. Furthermore, if your wife lacks sufficient credit or income within the next 5 years to obtain a loan, even if she tries in good faith to do so, she will not be able to refinance and it would be difficult under those facts for the court to even hold her in contempt if she takes reasonable measures to try.

Alan Roel Rothstein

This attorney is licensed in California. Posted 12 months ago.

Look at it this way. If your wife defaults and the bank takes the property, the default will also go on your financial record since you also signed the deed of trust that went with the mortgage. If your wife is in danger of defaulting, perhasps you can come to a modified agreement. On the other hand, if she was awarded the house together with the encumbrance, there is usually a "hold harmless" provision, but if she simply can't pay the mortgage, I don't know how she is expected to hold you harmless as well. You need to see a family lawyer in your area and put your heads together regarding how to solve this one.

Law Offices of Alan R. Rothstein